PAKISTAN COTTON MARKET:
Last week in the local cotton market, Moderate business trend was seen, quality and supply of Phutti was affected due to the hefty monsoon rains.
Continuous rains affected the cotton crop due to which farmers and buyers are worried, so conscious buying was observed. The mills decreased the buying due to low quality of cotton, while big textile groups increased their import. Prices of cotton increased by Rs 300 to Rs 350 per maund and rate of cotton reached at Rs 9300 per maund which is highest in the season. KCA also increased rs.300 and touched the level of rs. 8900/maund.
Increasing and firm trend was also witnessed in the prices in international market. The Rate of Promise of New York Cotton has crossed 66 American cents. The reason behind is continuous import by China. Another reason is that cotton production was affected in the biggest cotton producing state Texas while production may be affected due to hurricane in Mexico.
Furthermore, bearish trend was witnessed in the rate of cotton in India since many months but few days back Cotton Corporation of India has signed agreements of selling already stock cotton to local mills and textile and spinning mills of Bangladesh due to which the rate of cotton increased per candy (356) kg instead of decreasing. The reason behind increasing prices is that local Indian textile mills were taking interest in buying.
Due to the availability of low quality of cotton seeds this year sowing area was decreased. The crop was affected due to heavy rain especially the cotton crop in lower Sindh was more affected with rains. Sanghar district which is the highest cotton producer of the country was badly affected by the torrential rains. According to views, 20 to 22 percent cotton crop was affected in some areas of Sindh where water was not properly taken out from the fields. 70 percent of cotton was produced in Punjab but due to substandard seeds the sowing area was reduced however.
The rate of cotton in Sindh is in between Rs 8675 to Rs 8900 per maund. The rate of Phutti in Sindh is in between Rs 3700 to Rs 4100 per 40 kg. The rate of cotton in Punjab is in between Rs 8700 to Rs 9300 per maund. the rate of Phutti in Punjab is in between Rs 3800 to 4200 per 40 kgs. Overall prices of new cotton were in the range of USC 64~68 Lbs. (8675~9300/ maund).
|Opening Of the Week||Closing Of the Week||Change|
Crude Oil prices opened at USD 42.61with lower level as compared to last week closing figures.
In this week, crude oil prices rose in next session and dropped till closing hence closed on negative side at the end of week.
In last day of the week, Crude Oil price closed at USD 39.77 with decrease of USD 2.84 cents as of opening figure of week.
In last week values of Pak rupee showed little flections on both way against US Dollar’s, other major currencies showed mix trend in both Interbank and open markets.
At the end of week, Euro closed on a negative note with figure of 1.18 and British Pound also closed on negative note with figure 1.32 against USD.
|LC 120 Days||165.32||165.27|
NEW YORK COTTON FUTURE:
New York Cotton futures opened on higher levels on Monday as compare to previous week’s closing figures.
NYCF showed mix trend in this week and closed on negative side by the end of week.
At last day of the week, OCT 2020 closed at 64.12 with decrease of 29 point.
At last day of the week, DEC 2020 closed at 64.99 with drop of 17 point.
At last day of the week, MAR 2021 closed at 65.97 with downward of 08 points.
PAKISTAN YARN MARKET:
Local yarn market prices increased in asking after domestic cotton prices jumped up. Due to limited crop size projection spinners were forced to buy cotton and increase yarn rates as well. Very limited business finalized due to high prices and only some special count or urgent delivery order was placed in market. Spinners are also in comfort zone due to good yarn sale in domestic and export market in last two week passed.
PSF prices was remained stable during last week ended. PTA, MEG prices were stable after stable prices of oil in international market and same followed by International polyester fiber. For next week, prices are expected to remains stable.
Faisalabad trading market was stable and limited activity reported for last week ended. Demand again went slow in staple fiber. Fine counts yarn asking was increased and good trade was made in a week. Whereas 30/1cd and 31/1pc yarn remained slow in sale due to higher in asking prices.
Following are current asking prices of yarn in local market based on ex mills:
|16/1 CD||400 – 420|
|20/1 CD||425 – 445|
|30/1 CD||490 – 510|
|20/1 CM||500 – 515|
|30/1 PC 52:48||390 – 405|
|40/1 CM||600 – 630|
|60/1 CM||840 – 880|
|80/1 CM||1105 – 1205|
EXPORT YARN MARKET:
Market showed upward trend of prices for another week in a row. Cotton prices are continuously on the rise as big quantity has been damaged due to heavy rains and floods in both Punjab and Sindh province. Hence, suppliers kept their asking prices according to cotton prices and kept on increasing.
We might see slow business activity in days to come as now customers are resisting against such high asking prices.
Overall market is under good business activity as there has been handsome demand from customers and suppliers kept on selling limited quantities.
It is expected that prices will show firmness for the whole season as there has been shortage of cotton in PAKISTAN as well as worldwide. So, market will remain under same price tone with minor fluctuations.
Chinese customers kept on placing orders as per their requirements. Customers have accepted the increase in last 3-4 weeks’ time and placing orders.
European customers are back from holidays. However, they are still resisting against high asking prices and can’t digest it. So, it is expected that they will also start placing orders in days to come.
|16/1 CD||415 – 425||415 – 42||415 – 425||415 – 425|
|20/1 CD||425 – 435||425 – 435||425 – 435||425 – 435|
|20/1 CM||495 – 505||495 – 505||495 – 505||495 – 505|
|32/1 CD HOS UNWAXED 100% COT.||–||–||–||–|
|30/1 CM||520 – 530||520 – 530||520 – 530||520 – 530|
|32/1 CM||530 – 540||530 – 540||530 – 540||530 – 540|
|24/2 CD||485 – 495||485 – 495||485 – 495||485 – 495|
PAKISTAN FABRIC MARKET:
In current week under review the local fabric market continued its past trend and slow sentiments prevailed throughout the week for both narrow and wider width fabric. Though flow of inquiries improved but weavers could not book orders due to low bids from customers however limited orders booked after tough negotiations at slightly increased price level for both narrow and wider width fabrics.
Buyers have started lifting their old stocks which shows that finishers started getting their color assortments from their end customers to start processing their held orders. In narrow width weavers are booked till end September’20 whereas wider width looms till end October’20/early November’20 and offering onward deliveries For coming weeks we may foresee firm market sentiments with limited trading activity for both narrow and wider width looms.
Local fabric prices of regular items are as follows:
|Construction||Price US$/YD Ex Mill|
|20CDX16CD/128X60 – 63″ 3/1 ”S” TWILL PAK CTN||1.01 – 1.03|
|16X12/108X56 63″ 3/1||1.09 – 1.11|
|20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN||0.84 – 0.86|
EXPORT FABRIC MARKET:
Good market demand was observed during the week from Far Eastern and Asian markets however limited booking was noticed due to price difference of 4~5% with the customer target prices. Limited booking was recorded by Chinese customers whereas Korean and Bangladesh customers held their bulk buying due to price increase by the suppliers. Asking prices were increased by the suppliers about 2~3% during the week due to increase of yarn prices.
Most of the customers have their opinion that prices are abnormally high so it may came down but the situation is showing that prices may remain firm with upward trend as the cotton crop is short this season. At the same time suppliers are getting good orders from domestic home textile units hence their sales position is better.
Currently good suppliers are booked till mid of Oct and offering end Oct onward deliveries whereas average suppliers are booked till early Oct and offering mid Oct onward deliveries however 1/1 plain order deliveries are longer than other articles due to good booking in plain orders.
It is expected that customer will place bulk orders after some days when they feel that their target prices are not possible to get hence they will surly increase their targets. European customers have started to resume their works however some of the customers are still on holidays and will be back till mid of Sep. The Covid pandemic situation is getting better but still customers are waiting right time for bulk buying hence limited inquiries were received from European customers during the week resultant limited buying in T180~ T-250 mainly. USA market is still stagnant as no considerable inquiry was reported during the week Wider width suppliers are comfortably booked till mid of Nov and offering end Nov onward deliveries.
|Construction||Price US$/YD CNF Far East|
|20CDX16CD/128X60 – 63″ 3/1 ”S” TWILL PAK CTN||1.03 – 1.05|
|16X12/108X56 63″ 3/1||1.12 – 1.14|
|20CDX20CD/108X58 63″ 3/1 ”S” TWILL PAK CTN||0.88 – 0.90|
BED LINEN & TOWELS:
There has been a significant increase in prices of raw materials by 7-10% in the last 2 weeks. Cotton prices world-wide has shown bullish sentiments after the shrinkage in crop size. At the same time, there has been bulk demand from domestic market for cotton and blended yarns, customers are accepting increased price levels of bedding and towel articles.
Moreover, because of yarn export customers specially from China are buying bulk quantities from Pakistan and suppliers have increased their yarn/greige order prices by 5-7% already. They are actively discussing bulk orders for their new placements which will keep driving the prices upward.
Due to heavy Monsoon this season, we are getting an update that part of our cotton cultivation has been damaged.
So, it is expected that prices will increase further in days to come as demand is good, raw material supply is limited and customers are accepting increase as well as we can see with them booking orders in haphazard. Hence, it is suggested to confirm the orders on the given quotes so that prices can be locked with the suppliers ASAP!
Garment Industry of Pakistan have observed a healthy demand of apparels from US and European market as industry is almost back to normal life after Covid-19. Factories are booked till November and offering December onward shipments for new inquiries. Prices are firm as the suppliers of raw materials’ are showing reluctance to reduce prices. There has been a good demand from the domestic brands and most of the factories have orders in hand for SS21 season. On the export front also customers have placed orders for their SS21 programs.
Sustainablity remains an important element for green envioment. The term ‘sustainable fashion’ is widely believed to be an amalgamation of environmental, social and financial integrity. Most businesses put profits at the forefront of their strategy at the cost of human and environmental rights, but sustainable business models consider the profits, people, and planet to be equally important and factories in Pakistan are geared up to meet this requirement as they are catering to almost all the worlds’ largest brands of Apparel.
With a healthy response of foreign buyers sharing inquiries of garments and placing orders for next seasons have put apparel industry of Pakistan in a motivating zone where factories can also invest more to increase their infrastructure to delivery timely deliveries and quality products.
Local cotton prices increased due to the damage of cotton by hefty rains. Therefore, fine quality cotton prices are increased. Still buyers are focusing on import of cotton due to quality and price edge.
It is expected that domestic yarn market will remain dependent on raw cotton prices for next few weeks and prices will be according to demand and supply in each count of yarn.
Market showed good business activity in Export yarn as customers have booked orders with improved prices. it is projected that business activity will remain good in days to come as demand is increasing but suppliers are showing resistance against customer target prices.
For coming weeks we may foresee firm market sentiments with limited trading activity for both narrow and wider width looms in domestic market.
For export fabrics, it is expected that customer will place bulk orders after some days when they feel that their target prices are not possible to get hence they will surly increase their targets.
Garment industry has healthy response of foreign buyers sharing inquiries of garments and placing orders for next seasons have put apparel industry of Pakistan in a motivating zone where factories can also invest more to increase their infrastructure to delivery timely deliveries and quality products.
Bedding and towel market will see increased prices in the last quarter of 2020 due to significant factors that have raised during this season and will pertain in the upcoming months.
It is strongly suggested to place the orders at the existing prices after negotiations as it is expected that prices will remain firm and upward trend in coming days as well.